Early childhood education is one of the smartest investments a society can make. Children who access quality pre-primary education arrive at school better prepared, stay longer and learn more. And yet, for millions of the world’s youngest learners, disproportionately those from the poorest households, access remains out of reach. A core reason, the 2026 GEM Report shows, is money. A decade of stalled progress The story of early childhood […] The post Ineffective financing is holding early childhood education back appeared first on World Education Blog.
Early childhood education is one of the smartest investments a society can make. Children who access quality pre-primary education arrive at school better prepared, stay longer and learn more. And yet, for millions of the world’s youngest learners, disproportionately those from the poorest households, access remains out of reach. A core reason, the 2026 GEM Report shows, is money.
A decade of stalled progress
The story of early childhood education in the 21st century is one of progress and stagnation. Globally, the net enrolment rate of children in the year before primary school increased by almost one percentage point per year, from 64% in 2003 to 74% in 2015. But since then, it has increased by just one percentage point over nearly a decade, largely affected by the disruption of the pandemic. Participation rates for all children of pre-primary age tell a similar story.
This could be seen as puzzling given that, over the same period, there have been efforts to remove cost barriers to early childhood education: the number of countries offering at least one year of free pre-primary education rose from 46 to 69 between 1999 and 2023. More countries have also made attendance compulsory. However, stagnating enrolment figures tell us this isn’t enough.
Looking at changes in participation over time shows where the focus should lie. In Africa and Asia, enrolment in early childhood education has risen, but the absolute gap in participation rates between the richest and poorest children has barely moved in 20 years.
A public spending gap
One fundamental obstacle to equitable early childhood education is underfunding. Only 10 of more than 100 countries with data spend at least 1% of GDP on pre-primary education. Among 61 countries with comparable data, median public spending rose from 0.29% to 0.43% of GDP over two decades.
The data do, however, offer a compelling case for investment. Roughly doubling public spending from around 0.25% to 0.5% of GDP is associated with approximately tripling participation rates in the year before primary school. When public provision falls short, families must pay, and those who cannot simply go without pre-primary education. Few other policy levers offer returns like that.
With limited funding, targeting financing becomes essential. Alongside expanding infrastructure to improve access, one of the core messages to emerge from the analysis in the 2026 GEM Report is that equitable access to education requires equitable finance. Across-the-board allocations that treat all schools and all families equally will not close participation gaps. What is needed are redistribution mechanisms that deliberately direct resources toward those who need them most.
Some countries that have made this connection are seeing the results. Latin America has some of the best designed equitable finance mechanisms globally. No doubt partly as a result of this, in eight countries, children from the poorest quintile managed to close the participation gap with their wealthier peers between 2000 and 2024.
Targeted transfers and smart incentives
A closer look at how countries are financing equitable access reveals a varied toolkit.
Analysis for the 2026 GEM Report, which is featured on the PEER website, found that in addition to making it free, countries use three other mechanisms to make pre-primary education more affordable: transfers to institutions serving disadvantaged children (54%) and transfers to families either by the education ministry (26%) or some other ministry, usually social protection (55%). While transfers to institutions are mainly aimed at assisting children with disabilities (59%), transfers to students and households focus primarily on poverty (92%).
The argument for using cash transfers is backed by evidence. In rural Karnataka, India, scholarships that covered preschool fees raised participation by 20 percentage points, and saw cognitive gains persist into primary school. In El Salvador, children exposed to a conditional cash transfer programme from birth to age five or six were 12 percentage points more likely to be enrolled in preschool and 9 percentage points more likely to have completed at least one year. In France, Germany, and Norway, income-indexed fees, tax relief, and cash bonuses have helped bring low-income and immigrant families into the system.
Lithuania offers a model worth examining more closely. The government funds 20 hours a week of pre-primary education for every child, regardless of which type of institution they attend. Where children attend for longer hours, the additional cost falls to the institution’s owner. Since 2020, free lunches have also been provided to all children in pre-primary education, regardless of family income. The result is a system that distributes public support broadly while maintaining flexibility.
Some other promising tools remain massively underused. Preschool feeding programmes, for example, reach only around 2% of children in low-income countries and 13% in high-income countries. They are also rarely subject to systematic evaluation.
A question about the private sector
As demand for early childhood education has grown and public provision has struggled to keep pace, private providers have expanded their role. In one third of countries, private provision now accounts for more than half of total enrolment.
The challenge is not private provision per se, but the terms on which it operates. The GEM Report’s mapping of country profiles on its PEER website in 2021 found that while around 81% of countries offer incentives to non-state actors and 58% subsidize private institutions, regulation often focuses on administrative compliance rather than equity outcomes. Only about half of countries regulate fees charged by private providers, and just 15% regulate profit making. Without stronger accountability frameworks, public subsidies for private providers risk expanding access for those who already have it, rather than reaching those who do not.
The picture that emerges from the 2026 GEM Report is that countries which made the political and financial commitment to build comprehensive early childhood education systems have seen real results.
What is needed is coherence. Legislation aligned with financing and financing aligned with equity goals. Isolated programmes can demonstrate what is possible. But only systemic, sustained investment that is directed deliberately toward those who have been left out the longest will make universal, high-quality early childhood education a reality rather than an aspiration.
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